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The persistent labor shortage has nearly driven growth in China's export industries to a halt. More than half of the 477 respondents to a Global Sources survey said their overseas revenue did not increase during the past year, due mainly to the shortage. Forty-four percent even recorded a drop in exports, most by up to 10 percent.
Global Sources
30 May 2011
Labor shortage halts China export growth

The persistent labor shortage has nearly driven growth in China's export industries to a halt. More than half of the 477 respondents to a Global Sources survey said their overseas revenue did not increase during the past year, due mainly to the shortage. Forty-four percent even recorded a drop in exports, most by up to 10 percent.

Outsourcing and automating production are the key measures suppliers have taken to stem the negative effects of the labor shortage. Factories that were unable to find permanent or even part-time workers outsourced some processes to nearby plants. Many also invested in advanced machinery both to boost productivity and reduce the number of staff by as much as 50 percent.

As these measures have proven to be successful, makers intend to continue with the same strategies for the next few months. Survey results show automating and outsourcing production, and increasing export prices are the top three steps suppliers will take to counter the effects of the labor shortage, regardless of industry and geographic location.

At the same time, makers are also trying to fill job vacancies. Except for suppliers in inland provinces, offering incentives such as subsidies and bonuses, and improving working and living conditions are the top two steps taken to alleviate the labor shortage. Those based in the interior are giving better incentives and opportunity for additional training to entice workers.

Read the full report at Global Sources, a leading business-to-business media company and a primary facilitator of trade with China manufacturers and India suppliers, providing essential sourcing information to volume buyers through our e-magazines, trade shows and industry research.